New Legislation to Mitigate Motor Vehicle Price Rises in Venezuela

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CEIC Macro Watch - January 30, 2014 - Motor vehicle sales in Venezuela have been falling since 2008. On average, the recorded sales have declined by more than a thousand units of domestic and imported vehicles every year. Likewise, growth in the retail sales value and volume index for automobiles declined in 2013 by 3.28% and 13.25% respectively compared to the previous year. This has been attributed to the high prices of these motor vehicles with sellers jacking up prices on used vehicles, and the problem exacerbated by the relatively low supply of new vehicles.
To avoid higher prices for second-hand cars, President Nicolas Maduro has signed Decree no. 625. The law, known as Venezuela’s “vehicular regime decree”, sets the standard prices for imported and domestically-produced brand new and second-hand vehicles. The government anticipates that the new legislation will help moderate the country’s high inflation rate (which rose by more than 50% in 2013).
By Emmanuel Penetrante in Philippines - CEIC AnalystDiscuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription.
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